Rising Prices Bad News for us, Terrible News for the World's Poor

Canadians and citizens of other rich countries are understandably
concerned about the recent sharp rise in the cost of gasoline and
groceries.

As the cost of a barrel of oil continues to rise toward an expected
$200 (now sitting at about $135 and not long ago below $100) and our
cost per litre jumps five cents per week, citizens of the rich world
contemplate how to cut back and save. They might trade in
the old gas-guzzler for a hybrid, take a briefer vacation this year, or
take the bus and leave the car at home when possible. As food
prices go up 10% here, we rich consumers consider going out to eat less
often or adding a vegetarian option once a week.

Although we may need to make some adjustments, those of us who are well
off in the rich world really still have it easy, relative to what
people face in the developing world. Through our trade policies
and our lifestyles, we generally live well, continue to undermine the
natural environment, and consign the poor, which represents a majority
of humanity, to their place – last place – in our
planet’s economic hierarchy.

Inequalities between rich and poor are widening. Globally, the
top 20%, the highest income citizens in our world, account for 86% of
total private consumption expenditures, while the bottom 20% consume a
minimal 1.3%. The richest fifth consumes 45% of all meat and fish
(the poorest fifth only 5%). The richest fifth consumes 58% of
total energy (the poorest fifth only 4%). We richest fifth
consume 84% of all paper and own 87% of all vehicles (the poorest fifth
only 1% of each).

The United Nations estimates that it would take an additional $40
billion to what is currently being invested to achieve universal access
to basic social services in all developing countries – basic
education, water and sanitation, reproductive health, and general
health and nutrition. This figure is really very small when
compared to how the rich world spends its money. Annually, the US
spends $8 billion on cosmetics and Europeans spend $11 billion on ice
cream. Pet food sales in the US and Europe totals $17 billion
annually, and cigarette sales in Europe stand at $50 billion.

While food prices have gone up 10% in the rich world in recent months,
poor countries are facing increases on average of 40%.

Food riots have broken out in many countries, including in Haiti, Indonesia, the Philippines and Egypt.

Families are having to cut back from three to two, or even from two to
one, meal per day, and are cutting meat out altogether. The
switchover of land to growing biofuels rather than food is one cause of
the current world food crisis. Other causes include the effects
of climate change, causing storms or drought in different areas, and
prohibitive trade barriers that stifle developing world exports and
economies.

The UN estimates that at least 100 million new people are currently in
food crisis mode. Its Secretary-General, Ban Ki-moon, speaking at
a world food summit recently, said that he has witnessed people in
Liberia buying rice by the cup whereas they would normally buy it by
the bag.

His predecessor, Kofi Annan, is now heading up the Alliance for a Green
Revolution in Africa (AGRA) that will, in partnership with the US
government foreign assistance agency Millennium Challenge Corporation,
try to boost African agriculture as a way to deal with food shortages
and prices.

Annan has called for a “green revolution” through major
investment and programming: in his continent’s infrastructure
(Annan says that 40% of African crops are lost after harvest. New
roads could ease this problem.), new water technologies for efficient
and effective irrigation, financing (as African small holders lack
capital), and the development of new seeds and fertilizers. This
major continental project will focus on three countries: Ghana,
Madagascar and Mali.

The challenge will be for this green revolution to bring better results
than previous ones. The first one, in the 1960s, brought improved
livelihoods largely to better off farmers while leading to the
dispossession of poor landholders, and introduced chemicals and
technologies that hurt the environment and were accessible only to
those already well off. As well, the US connection will focus on
development that promotes Western-style governance and economic models,
opening it up to criticism by those who want development, but not the
political control and economic biases.

For the rich, the oil and food crises raise the question of how we can live more efficiently.

For the poor of the world, the question is how will they be able to
live at all? The scale of the crisis is so very different for us
and for them.

We need to open ourselves up to change in our lifestyle, in our ways of
being generous, and in our trade and other economic policies.
While we should demand honest government and human rights guarantees
from developing nations, we also need to challenge ourselves to live
within the means that the world affords us and to narrow the gap
between rich and poor.